Poverty and economic policies: Part - I

In 1992, the UN declared October 17 as the International Day to Eradicate Poverty. Since then, on this day governments around the world pledge to reduce poverty and eradicate extreme poverty. However, all the pledges, promises and slogans to end abject poverty have failed to improve the situation for nearly 1.70 billion people around the world who still live in poverty.

The real question is whether we can eradicate – or rather reduce – poverty without changing economic policies and redistribution of wealth. Capitalist ruling elites around the world have failed to address this acute problem, and poverty is a by-product of the existing social and economic system.

The system we have for producing and distributing wealth is capitalist in nature. It is organised in ways that allow a small elite to control most of the capital – factories, machinery, tools, land – used to produce wealth. This encourages the accumulation of wealth and income by the elite and regularly makes heroes of those who are most successful at it. It also leaves a relatively small portion of income and wealth to be divided among the rest of the population. With a majority of the people competing over what’s left to them by the elite, it is inevitable that a substantial number of people are going to wind up on the short end – living in poverty or with the fear of it much of the time.

In part, then, poverty exists because the economic system is organised in ways that encourage the accumulation of wealth at one end and create conditions of scarcity that make poverty inevitable at the other. But the capitalist system generates poverty in other ways as well. In the drive for profit, for example, capitalism places a high value on competition and efficiency. This motivates companies and their managers to control costs by keeping wages as low as possible and replacing people with machines or replacing full-time workers with part-time workers. That makes it a rational choice to move jobs to regions or countries where labour is cheaper and workers are less likely to complain about poor working conditions, or where laws protecting the natural environment from industrial pollution or workers from injuries on the job are weak or unenforced. Capitalism also encourages owners to shut down factories and invest money elsewhere in enterprises that offer a higher rate of return.

These kinds of decisions are a normal consequence of how capitalism operates as a system. But the decisions also have terrible effects on tens of millions of people and their families and communities. Even a full-time job is no guarantee of a decent living, which is why so many families depend on the earnings of two or more adults just to make ends meet. All of this is made possible by the simple fact that in a capitalist system most people neither own nor control any means of producing a living without working for someone else.

Clearly, patterns of widespread poverty are inevitable in an economic system that sets the terms for how wealth is produced and distributed. If we’re interested in doing something about poverty itself – if we want a society largely free of impoverished citizens – then we’ll have to do something about both the system people participate in and how they participate in it. But public debate about poverty and policies to deal with it focus almost entirely on the latter with almost nothing to say about the former.        What generally passes for ‘liberal’ and ‘conservative’ approaches to poverty are, in fact, two variations on the same narrow theme of individualism.

It may mean that capitalism is in some ways incompatible with a just society in which the excessive well-being of some does not require the misery of so many others. It won’t be easy to face up to such possibilities, but if we don’t we will guarantee poverty its future and all the conflict and suffering that go with it.

Poverty kills people silently. Poor people die because they can’t get food, shelter, healthcare. They can’t spend money on safety and education. Low incomes force them to live in poverty.

It is not polite to talk about all this. We talk about the poverty rate or the poverty level or the poverty gap, but not about children catching fire and adults wasting away. We talk about economic development and markets and education, not the people who die each year coughing blood as tuberculosis takes over their body. They don’t die from tuberculosis. They die because they have no awareness about it. They even die when the government provides them medicines. They die because they live in unhygienic conditions and can’t afford decent food to survive. It is easier to believe that poverty causes people to wear old clothes, live in small houses, or forego owning a television than it is to admit that people on the bottom of the socioeconomic ladder often die early as a result of that poverty.

Poverty doesn’t just hurt your body, it also hurts your soul. Poverty kills dreams and murders hope. It squashes every last ounce of ambition; it impacts the old, but targets the young. It steals more than full bellies and healthy bodies; it suffocates the future and squanders potential.   

To be continued

The writer is a freelance journalist.